to be more than creators, and need to learn how to monetise their ideas. The Lumière brothers never attended Business School. And this is probably the reason why their creation did not result in the movie industry being built around Lyon, but in Los Angeles. The Lumière brothers of the 21st century need business education, but such education must fulfill three requirements: 1. Business Schools need a good curriculum. To transform ideas into businesses, innovators need to know finance, marketing, and strategy. Design and technology skills are not enough. This also means that Business School curricula should emphasise management skills at the expense of experiential learning and leadership skills. Traditional Business School disciplines are important – especially for those who do not plan to work for a large organisation – because founders have to have a helicopter view of their companies, which requires a deep understanding of all dimensions of performance. 2. As technology will be the basis for many of the upcoming innovations, Schools need to embrace technology-related subjects. At IMD, we have reduced the importance of accounting in the MBA curriculum in favour of coding, a one-week innovation journey, and courses covering artificial intelligence, Blockchain, and Big Data analytics. We have also enlarged the finance and marketing courses. 3. For Schools to be part of the innovation ecosystem of their country, they must partner with the public and private sectors to create synergies. Governments need to realise that attraction of talent to Business Schools results in innovation, and therefore more jobs and prosperity. At the same time, Business Schools as academic institutions need to feed the country with research related to entrepreneurship, family business, and innovation. Business Schools must hear the demands of companies and adapt their programmes to the needs of the labour market. The benefit for Schools is that, as the reputation of their country increases, so does the ability of the School to attract better students. Innovators are not born but made. Business Schools are part of a country’s innovation ecosystem and while technical universities (the La Martinières of our times) continue generating ideas, Business Schools transform these ideas in businesses, jobs, and competitiveness.
decades. Desigual, one of the most international fashion retailers, was founded by an alumn from the IMD MBA programme. The founders of Zoom Technologies, Peloton, and Grubhub planted the seeds of their companies while attending classes at Stanford, Harvard, and Chicago Booth respectively. How can universities, and Business Schools in particular, be centres of excellence for innovation? First, let me point out that, for innovation ecosystems to succeed, they have to combine three key success factors. The first is access to capital. The benefits of finance are important and have been documented by academics and international organisations. In 2000, Professor Jeffrey Wurgler (then at the Yale School of Management and currently at NYU), highlighted in a paper published in the Journal of Financial Economics that more financially developed countries allocate capital with greater efficiently across industries. Specifically, Wurgler found that ‘developed’ financial markets (measured by the size of the domestic stock and credit markets relative to GDP) such as the US and the UK, increase investment in growing industries and decrease it in their declining industries. competitiveness and innovativeness of countries. Over time, the interaction between Wall Street and Main Street – or between the financial system and the real economy –reinforce each other, and we observe the positive impact that a good financial system has on economic growth and quality of life. Conversely, countries that forget the financial sector struggle to develop a competitive economy, despite their innovation and talent. The second important factor is regulation. To be innovative, firms need to have rules that protect intellectual property, bankruptcy laws that allow failure and recovery, and fiscal rules that facilitate foreign investment and talent attraction. Regulation removes uncertainty, and this explains why innovation is more difficult in Europe, where innovators need to comply with a myriad of regulatory regimes, compared with the US and China. The role of the education system When good regulation is combined with access to capital, innovators emerge. This is where the third factor – the education system – plays a vital role. Business Schools are becoming important parts of a country’s innovation ecosystem. Entrepreneurs need Effective financial systems are both the consequence of and the reason for the
ARTURO BRIS is Professor of Finance at IMD (The Institute of Management Development) and Director of the world-renowned IMD World Competitiveness Center. His new book, The Right Place: How National Competitiveness Makes or Breaks Companies is published by Routledge.
| 25
Ambition | BE IN BRILLIANT COMPANY
Made with FlippingBook - Share PDF online